2023-07-11 10:26:45 ET
Affirm Holdings ( NASDAQ: AFRM ) stock jumped 7.8% in Tuesday morning trading after Mizuho Securities USA analyst Dan Dolev said the increase in Google searches for Affirm's Debit+ card "is reminiscent of the 'buzz' that engulfed Square's Cash Card in its early days (2017)."
Dolev's model suggests that if Debit+ (a hybrid pay now, BNPL debit card) follows Block's ( SQ ) Square Cash Card trajectory, "it may boost AFRM's medium-term volume CAGRs (compounded annual growth rates) from mid-20s to mid-30s."
The Debit+ offering may dilute revenue less transaction costs as a percentage of gross merchandise volume, but the "incremental volume and revenue growth benefit should be positive catalysts and help offset potential sales headwinds from the upcoming student loan refinancing," Dolev wrote in a note to clients.
The analyst raised his total revenue estimate for FY2024 to $2.11B from $2.07B and for FY2025 to $2.56B from $2.45B. His price target for Affirm ( AFRM ) increased to $20 from $17. He has a Buy rating on the stock.
Dolev's Buy rating contrasts with the SA Quant rating of Hold . The average SA Analyst rating and average Wall Street rating also stand at Hold.
More on Affirm Holdings:
- Affirm: What's Next After the Dead Cat Bounce of the Shares
- Affirm: A Brilliant Business Model Atop a Giant Net Liquidity Position
- Affirm to wind down Returnly returns management service
- Affirm: Buy Now, Pay the Price Later
- Affirm Holdings stock surges after Amazon Pay adds its Adaptive Checkout
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Affirm Holdings stock advances as Mizuho sees Debit+ card gaining traction